Home / World / Tesla plunges to 2.5-year low after analyst who cut his price target for the 4th time this year warns it’s facing a ‘code red situation’ (TSLA)

Tesla plunges to 2.5-year low after analyst who cut his price target for the 4th time this year warns it’s facing a ‘code red situation’ (TSLA)



  • Tesla shares fell on Monday after an analyst lowered its target price in stocks in a report that followed a session of strong sales on Friday.
  • The Wedbush analyst pointed out a lot of concerns about the electric car maker, including an email that CEO Elon Musk sent to employees last week and details the cost reduction measures.
  • Investors abandoned the stock last week after the National Transportation Safety Board said Tesla's autopilot function was activated during a fatal crash that involved a Model 3 in March.
  • See the Tesla trade live.

Tesla shares fell on Monday after an analyst reduced his target price in a heartbreaking report, based on a series of problems facing the electric car maker.

"We continue to have great concerns about the trajectory of Tesla's growth prospects and the underlying demand on Model 3 in the United States in the coming quarters," Wedbush analyst Dan Ives said in a note to clients on Sunday. night.

He added that with a "red-code situation at Tesla, Musk & Co. is expanding to insurance, robotaxis and other projects / science fiction efforts, when the company should focus laser to shore up the core demand of Model 3 and simplify its Business model and expense structure.

RELATED: Take a look at the Tesla 3 Standard Model:

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ARCHIVE: in this file photograph of February 9, 2019, buyers review a Model 3 at a Tesla store in Cherry Creek Mall in Denver. Tesla is changing all its store sales to the internet, saying that the measure is necessary to reduce costs in order to sell the Model 3 of the mass market at an initial price of $ 35,000. The company from Palo Alto, California, announced the change on Thursday, February 28. (Photo by AP / David Zalubowski, file)

ARCHIVE: in this file photo of February 9, 2019, a sign with the company's logo is displayed outside a Tesla store in Cherry Creek Mall in Denver. Tesla's main lawyer is leaving the company after only two months at work. Tesla said in a prepared statement on Wednesday, February 20, that Legal Counsel Dane Butswinkas will return to his legal practice in Washington, D.C. He will continue working for Tesla as an external consultant. No reason was given for the game. (AP Photo / David Zalubowski, Archive)

ARCHIVE: in this archive photograph of Saturday, February 9, 2019, buyers review a Model 3 at a Tesla store in Cherry Creek Mall in Denver. (AP Photo / David Zalubowski, Archive)

ARCHIVE: in this archive photograph of Saturday, February 9, 2019, buyers review a Model 3 at a Tesla store in Cherry Creek Mall in Denver. (AP Photo / David Zalubowski, Archive)

The cars pass through a Tesla showroom, as Tesla announces that it will close many stores and that its sales will now be made online only worldwide, in West London, Great Britain, March 1, 2019. REUTERS / Toby Melville

A Tesla Model 3 car is shown at the Canadian International AutoShow in Toronto, Ontario, Canada, on February 15, 2019. REUTERS / Chris Helgren

A Tesla Model 3 car is shown at the Canadian International AutoShow in Toronto, Ontario, Canada, on February 15, 2019. REUTERS / Chris Helgren

SHANGHAI, CHINA – FEBRUARY 22: More than 1,800 Tesla electric cars, including more than 1,600 Model 3 from the United States, arrive at Pudong Waigaoqiao port on February 22, 2019 in Shanghai, China. The cargo ship & # 39; Morning Cindy & # 39; that transported more than 1,800 Tesla electric cars, including more than 1,600 US Model 3, arrived in Shanghai on Friday. (Photo by Zhao Yun / VCG through Getty Images)

SHANGHAI, CHINA – FEBRUARY 22: More than 1,800 Tesla electric cars, including more than 1,600 Model 3 from the United States, arrive at Pudong Waigaoqiao port on February 22, 2019 in Shanghai, China. The cargo ship & # 39; Morning Cindy & # 39; that transported more than 1,800 Tesla electric cars, including more than 1,600 US Model 3, arrived in Shanghai on Friday. (Photo by Zhao Yun / VCG through Getty Images)




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Tesla's stock fell as much as 7.5% on Monday to its lowest level since December 2016. Ives lowered its target to $ 230 from $ 275 per share, which means it is still betting on a 17% rally from here. Less than a month ago, he had a target price of $ 365, which makes him one of Wall Street's most optimistic analysts.

He and a group of other Wall Street analysts have drastically moderated their view of stocks in recent months, as growth, profitability and demand concerns have had a great weight on Tesla.

Read more: The Tesla analyst cuts his goal again and says that everything you think you know about him is in question.

Although Ives saw the capital increase announced by Tesla earlier this month as a "smart strategic breakthrough", it is increasingly concerned about the company's "cash crisis" as it builds its Shanghai factory and attempts to increase the company's production. Model 3

And the revelation that Musk is urging employees to be aware of costs with their company's expenses, by an internal email leaked to the media and confirmed by Business Insider, is not exactly inspiring confidence, Ives said. .

Read more: Elon Musk says in an email to employees that the new cost reduction measures are "the only way for Tesla to become financially sustainable"

He added that the company has "continuing concerns about Tesla's ability to balance this 'perfect storm' of lower demand and profitability concerns that will weigh on the stock until Musk & Co. demonstrates otherwise in terms of delivering solid results in the coming quarters. "

The report followed a session of strong sales on Friday.

Tesla shares closed the day down 7.6% after the National Transportation Safety Board said in a preliminary report that Tesla's autopilot feature was activated during a fatal accident involving a Model 3 in March. .

The fall on Monday raised the 2019 losses of the share to 40%.


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